A Model for Comparative Analysis of Inventory Costs of JIT and EOQ Purchasing in the Ready Mixed Concrete Industry

Min Wu; Mao Zeng Xu

doi:10.4028/www.scientific.net/MSF.532-533.1020

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HomeMaterials Science ForumMaterials Science Forum Vols. 532-533A Model for Comparative Analysis of Inventory...

A Model for Comparative Analysis of Inventory Costs of JIT and EOQ Purchasing in the Ready Mixed Concrete Industry

Abstract:

A model for comparing the inventory costs of purchasing under the economic order quantity (EOQ) system and the just-in-time (JIT) order purchasing system in existing literature concluded that JIT purchasing was virtually always the preferable inventory ordering system especially at high level of annual demand. By expanding the classical EOQ model, this paper shows that it is possible for the EOQ system to be more cost effective than the JIT system once the inventory demand approaches the EOQ-JIT cost indifference point. The case study conducted in the ready-mixed concrete industry in Singapore supported this proposition.

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Periodical:

Materials Science Forum (Volumes 532-533)

Pages:

1020-1023

DOI:

https://doi.org/10.4028/www.scientific.net/MSF.532-533.1020

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Online since:

December 2006

Authors:

Min Wu, Mao Zeng Xu

Keywords:

Cost Indifference Point, EOQ, JIT, Ready-Mixed Concrete

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